January 15, 2009

Should Obama Take the EPA Off the Road?

President Obama’s first move for clean tech could simply be getting the federal government out of the way in one area where individual states are already poised to move aggressively: fuel economy.

Candidate Obama promised to do as much on the campaign trail, and yesterday, Lisa Jackson, his nominee for EPA administrator, provided some hope that he will follow through in office.
Jackson, formerly New Jersey’s top environmental regulator, pledged in a Senate confirmation hearing yesterday that she would “immediately revisit” whether to allow states to set their own CO2 emissions limits on automobiles.

The CO2 tailpipe standards at issue were set by California in 2004, and subsequently adopted by 18 other states. They are more stringent than the tightened Corporate Average Fuel Economy (CAFE) standards approved by Congress in December 2007. Federal courts rejected auto-industry challenges against the tougher state standards, but Bush’s EPA rode to the rescue by denying California (and by extension its partner states) a federal waiver needed to implement the rules.
Jackson, if confirmed by the Senate, will have the power to immediately take an obstructionist EPA off the road. This could have a significant impact on technology development, given that minimal innovation is required to meet the tightened CAFE standards.

Automakers and their allies oppose state-by-state regulation of greenhouse gases. They say such rules are an indirect attempt to regulate fuel economy, which is a federal responsibility. They also say state rules would add costs and create market chaos, especially for dealers near borders with states that don’t have their own rules.

Natural Resources Defense Council vehicles policy director Roland Hwang suggested recently in a provocative report that automakers could solve such problems themselves: “The obvious solution to all of the automaker concerns–including their desire for a uniform national standard–is to adopt California’s [greenhouse gas] standards nationwide.”

Hwang analyzed fuel-economy projections in business plans that GM and Ford Motor submitted to Congress last month during their pursuit of a federal loan package. (His analysis excludes Chrysler, whose business plan was short on fuel-economy details.) He concludes that GM and Ford could comply with the California standards with little to no effort:

All three companies state that they will at least comply with future federal fuel economy (“CAFE”) standards. This analysis demonstrates that GM and Ford are now positioned also to comply with the more stringent California greenhouse gas standards if they were extended to apply nationwide. [My emphasis]

Peter Fairley, an independent journalist and editor of the Web journal Carbon-Nation,
tracks energy innovation around the globe, from the solar-powered
villages of Bolivia’s Cordillera to China’s mechanizing coalfields.